Microsoft CEO Satya Nadella Officially Comments On Xbox Layoffs

Xbox Lays Off Thousands, Microsoft CEO Says "Streamlining" Is "Great To See" Published Sep 26, 2026, 5:50 AM EDT James Lucas is an Executive Editor at TheGamer who has worked in professional journalism since 2018. A Newcastle University graduate with a degree in Journalism, Media, and Culture, they have written hundreds of guides, news stories, and original reports, with bylines in IGN, NME, GaymingMag, and VG247, sourcing interviews with studio heads, legendary industry figures, prominent actors, and more. An expert on FPS games, Soulslikes, RPGs, and survival horror, James has intimate knowledge of a wide variety of titles, providing in-depth coverage and exclusive profiles. Some of the games they have extensively covered include: Half-Life 3, Counter-Strike, Elden Ring, and Fallout. They pride themselves on their consistently thorough research, leveraging nearly a decade of industry experience. You can reach them at James.t@thegamer.com Sign in to your TheGamer account As part of the Xbox reset, newly appointed CEO Asha Sharma announced that Microsoft would be cutting 3,200 jobs across fiscal years 2026 and 2027, shutting down and cutting ties with studios in the process. So far, almost 2,000 employees have been let go in what Microsoft CEO Satya Nadella describes simply as "streamlining," but he doesn't have much to offer in the way of condolences for those now without work. "There's some amount of streamlining the team is doing, and Asha is doing, which is great to see," Nadella said on the Sources Podcast (via GamesRadar+). "I feel fantastic about the IP we have right now. If I look at the studios, the IP portfolio we have, and our ability to then take that and produce great games going forward, I feel fantastic." While Nadella Feels "Fantastic", Devs Allegedly Describe Xbox As "Chaotic" The actual picture being painted of Xbox internally right now by current and former employees, according to a recent report by Aftermath, is far bleaker than the picture presented by Nadella and Sharma. Staff describe "aggressive goals" that "would have been unrealistic even before the layoffs," alleging that the "incompetence of Xbox management" is only making things worse. id Software staff reportedly describe the environment within Xbox as "chaotic," claiming that the only communication the team has received from leadership thus far is that "they want higher profits, and they want it now." Considering how many studios have been hit by layoffs, including Obsidian Entertainment, which lost a quarter of its staff before being pushed to make a new Fallout game under Bethesda, it's difficult to imagine that id Software's experience is entirely isolated. Asha and the team have said that Xbox is gonna get back to growth this fiscal year, and that's the plan they're executing on, and in that process do a bang-up job of producing some great games. Nadella doesn't have any reassurances on the instability those within Xbox are facing, either. "We want to be a great publisher and a great platform provider for games, across both PCs and Xboxes," he continued. "That is sort of our goal, and I think Asha and the team have said that Xbox is gonna get back to growth this fiscal year, and that's the plan they're executing on, and in that process do a bang-up job of producing some great games." Great games are typically not made by those under constant fear of layoffs and studios being sunset, which Nadella again fails to address.